The Hong Kong government should grab the opportunity to make the city the home for the new Asian infrastructure investment bank proposed by President Xi Jinping during his trip to Southeast Asia last week, says a top banker and influential political adviser to Beijing.

Xi made the surprise proposal at his meeting with Indonesian President Dr Susilo Bambang Yudhoyono on October 2, saying Asia should have an infrastructure-dedicated bank to "promote interconnectivity and economic integration in the region".

He also said Beijing would be happy to take the lead in offering financial support to establish such a new regional bank.

China has more than US$3 trillion in foreign exchange reserves, the world's largest, and it is the No 1 holder of United States government debt, although Beijing is keen to reduce the size of its foreign reserves by diversifying its investments worldwide.

Xi did not say where he thought the new bank should be headquartered. However, political and economic analysts were quick to name Singapore, Kuala Lumpur in Malaysia, Beijing and Shanghai as possible candidates.

Fang Fang, chief executive of investment banking for JP Morgan in China, told the South China Morning Post Hong Kong would be the best location.

He said the city is already an established financial centre where major financial institutions already gather and a hub for global deal-makers and fundraisers. The bank, he said, could be a platform for capital-raising for infrastructure investments and play a deal-making role to drive investments and Hong Kong was ideal to fulfil these roles.

Fang said the Hong Kong government should grab the opportunity in order to benefit the city's economic growth.

"It could be the first multilateral government-sponsored financial institution to be based in Hong Kong, and it would reinforce Hong Kong as a global financial centre," said Fang, who is a member of the Chinese People's Political Consultative Conference, the country's top political advisory body.

"It would make Hong Kong better integrated with the other Asian countries, particularly the Asean countries - which would provide the city with more business opportunities," said Fang. "It would boost other service sectors in Hong Kong as well."

China is already the largest trading partner of the Association of Southeast Asian Nations. Asean's member states include the major economic powers in the region, such as Singapore, Malaysia, Thailand and Indonesia. Xi attended the Asia-Pacific Economic Co-operation (Apec) forum earlier this week after state visits to Indonesia and Malaysia.

Xi's bank proposal is a conceptual plan that was discussed internally for at least a year but was originally scheduled to be announced next year, when Beijing hosted Apec's annual forum.

This article appeared in the South China Morning Post print edition as HK ideal to host Xi's new bank, says top banker

No I resolutely object this! Time can be better spent by HK to discuss where should we place our garbage bins.

JC Oct 10th 201311:43pm

Singapore would be the best choice. Neutral to all countries, and unlike HK, a truly multicultural city. The World Bank's Asia HQ is in Singapore. The ADB has got quite a presence as well. If Beijing is interested in working with ASEAN, for everyone's benefit, and not just Beijing's benefit, then it would make sense to site the proposed bank in Singapore - Southeast Asia's regional financial hub, a hub for forex and long term debt capital, amongst other things, and Beijing's most trusted source of wise counsel about the region. This bank can work closely with international organisations like the World Bank and the ADB. The APEC secretariat is in Singapore, and the ASEAN Secretariat is less than two hours away in Jakarta

Neutral to all countries? Get real mate! SG is far from being honest broker. Both effectively single ruling party so can relate better with BJ maybe.****www.thestandard.com.hk/breaking_news_detail.asp?id=34279****www.thejakartaglobe.com/archive/extradition-treaty-on-agenda-as-sby-holds-singapore-talks/

swami.vas Oct 10th 201310:02pm

It is absolutely appropriate for Hong Kong - Asia's World City - to seriously present its claim to be chosen as the location for the just proposed Asian Infrastructure Bank or should it aptly be named Asian Infrastructure Development Bank for reasons which need no narration or elaboration as Hong Kong has crystal clearly proved its pre-eminent position as the Asian financial hub and has been the economic growth engine of modern China in many ways in the past three decades or so! The new bank will serve as an ideal outlet for sovereign investment funds from various countries in Asia and even the Middle East and Africa, and could even eventually do away with the need for sole dependence on US dollar for international transactions by establishing an Asian Dollar!

k.j.ho@****** Oct 10th 20138:09pm

"No I resolutely object this! Time can be better spent by HK to discuss where should we place our garbage bins...."If HK gets marginalized in the long term then it is because of people like you...